Moneycontrol Be a Pro
Get App
Last Updated : Oct 23, 2019 05:53 PM IST | Source: Moneycontrol.com

JSW Steel Q2 consolidated net profit up 21% at Rs 2,536cr

The company had posted profit of Rs 2,087 crore in the same quarter last year.

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

A significant write-back of the deferred tax liability – due to the lowering of corporate tax – helped JSW Steel post a 21.5 percent growth in its consolidated net profit at Rs 2,536 crore in the quarter ended September 2019.

The company had posted profit of Rs 2,087 crore in the same quarter last year.

While the company has decided to stay with the existing tax structure till it utilises the benefits of the minimum alternative tax credit, JSW Steel has written back Rs 2,150 crore to the profit and loss account.

Close

In September, Finance Minister Nirmala Sitharaman had announced considerable reduction in corporate tax.

JSW Steel’s total revenue of the company was down 18.5 percent at Rs 17,572 crore versus Rs 21,552 crore, YoY, hurt by lower production and sales volumes.

The company's consolidated sales volumes stood at 3.56 million tonnes, which declined 9 percent YoY and 3 percent QoQ. The saleable steel sales for the quarter stood at 3.56 million tonnes, down 9 percent YoY.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was down 44.3 percent at Rs 2,731 crore, while margin was down 720 bps at 15.5 percent.

At close, JSW Steel shares was up 2.12 percent at Rs 224.25 on the BSE.

Lower capex

Though the company hopes to meet its guidance for production and sales for the second half of the year, the steelmaker reduced its capex.

“In light of the prevailing market conditions… the company has deferred Rs 4,700 crore worth spends to the next year. This implies a revised cash flow plan of Rs 11,000 crore for the current fiscal year (vs previous guidance of Rs 15, 708 crore).

It has pushed capex for facilities in Tarapur, Vasind and Rajapura for future years, said Jt Managing Director and Group CFO Seshagiri Rao.

But that has not taken away the company’s positive outlook for the remaining two quarters. It will match the production and sales numbers of the second half of the last financial year. The 3 percent drop in the first half of the present financial year, will remain. Thus, overall for the financial year, the company will meet 97 percent of its guidance of 16.95 million tons in annual production, and 16 million tons in sales.

JSW Steel is building better sales and production guidance on improved demand for steel in the next two quarters. It expects demand to increase by 5 percent in the second half.

That will be a big improvement from the 3.3 percent growth in demand in the second quarter. In fact, in September, overall steel demand grew by less than a percent.

The company is seeing an increase in demand from clients in the two-wheelers and four-wheelers space. But demand is still weak from the commercial vehicles segment, said Jayant Acharya, Director, Marketing.

 

 

LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.
First Published on Oct 23, 2019 05:00 pm
Loading...
Follow us on
Available On